Waffle House Is Accused of “Chronic” Wage Theft

The Union of Southern Service Workers (USSW), an affiliate of Service Employees International Union (SEIU), filed a complaint with the U.S. Department of Labor, requesting it to remove Waffle House’s ability to take a tip credit. The complaint alleges that servers are spending at least one to three hours per shift engaged in work outside of their tipped occupation of servers, depriving workers of $15.6 to $46.8 million dollars per year.

The Strategic Organizing Center, a labor federation including SEIU, released a survey of more than 400 Waffle House employees that found that 90% of surveyed workers experienced one form of wage theft in the last year. 75% of Waffle House workers reported that they had “been required to perform job tasks before clocking in or after clocking out,” 72% were “not been paid for all hours worked or all tasks performed,” 58% had been paid a much lower tipped wage for work they did not receive tips on, and 21% reported that they did not always receive overtime pay despite working over 40 hours per week.

Under the Fair Labor Standards Act, an employer is permitted to pay tipped employees $2.13 per hour in direct wages, so long as the direct wage and tips earned equal at least the $7.25 hourly federal minimum wage. However, an employer may only take a tip credit for the work performed by the tipped employee that is part of the employee’s tipped occupation.  The union argues that janitorial tasks, dishwashing, and cooking performed by servers fall outside their tipped roles and should not be considered tip-supported work, meaning the company cannot apply a tip credit for those duties.

Restaurants in New York, follow the Hospitality IndustryWage Order that mandates that “[o]n any day that a service employee or foodservice worker works at a non-tipped occupation for two hours or more, or for more than 20 percent of his or her shift, whichever is less, the wages of the employee shall be subject to no tip credit for that day.”

If you have questions about how the tip-credit affects restaurant employers or employees, please contact the attorneys of Pechman Law Group at 212-583-9500.

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